Correlation Between KOBE STEEL and ScanSource

Can any of the company-specific risk be diversified away by investing in both KOBE STEEL and ScanSource at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KOBE STEEL and ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KOBE STEEL LTD and ScanSource, you can compare the effects of market volatilities on KOBE STEEL and ScanSource and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KOBE STEEL with a short position of ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOBE STEEL and ScanSource.

Diversification Opportunities for KOBE STEEL and ScanSource

0.09

Correlation Coefficient

KOBE STEEL  ScanSource

Significant diversification

The 3 months correlation between KOBE and ScanSource is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding KOBE STEEL LTD and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource and KOBE STEEL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KOBE STEEL LTD are associated (or correlated) with ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of KOBE STEEL i.e., KOBE STEEL and ScanSource go up and down completely randomly.

Pair Corralation between KOBE STEEL and ScanSource

Assuming the 90 days trading horizon KOBE STEEL LTD is expected to generate 0.84 times more return on investment than ScanSource. However, KOBE STEEL LTD is 1.19 times less risky than ScanSource. It trades about 0.21 of its potential returns per unit of risk. ScanSource is currently generating about 0.05 per unit of risk. If you would invest  908.00  in KOBE STEEL LTD on May 22, 2025 and sell it today you would earn a total of  130.00  from holding KOBE STEEL LTD or generate 14.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

KOBE STEEL LTD  vs.  ScanSource

KOBE STEEL LTD

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in KOBE STEEL LTD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, KOBE STEEL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

ScanSource

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in ScanSource are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ScanSource is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KOBE STEEL and ScanSource

The main advantage of trading using opposite KOBE STEEL and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOBE STEEL position performs unexpectedly, ScanSource can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ScanSource will offset losses from the drop in ScanSource's long position.

The idea behind KOBE STEEL LTD and ScanSource pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.